Article 13: If You Want To Force Google to Pay Artists More, Force Google to Pay Artists More

The European Union is fumbling towards a final draft of the new "Copyright in the Digital Single Market Directive," including the controversial "Article 13," which requires all but the smallest online platforms to set up crowdsourced databases of copyrighted works and censor anything a user posts that matches (or partially matches!) the contents of these databases.

This is a system that's ripe for abuse. Where more modest versions of these blacklist systems exist, artists find themselves targeted by fraudsters who remove their work from the platforms they rely on to earn their livings, impersonating them and sending copyright takedowns in their names.

And yet, Article 13 has no penalties for this kind of abuse. It doesn't even let tech companies refuse to accept future database entries from fraudsters who get caught repeatedly abusing the system.

Transparency will let us agree on what we're fighting over

Rightsholder groups argue that Article 13 is necessary because Google is underpaying the artists whose work appears on YouTube (and other tech platforms are underpaying for their use of entertainment materials). This is a debate that is muddied by a lack of transparency on all sides. There are no reliable numbers on:

How much money Google and other Internet companies take in from the ads and subscription payments on the media they distribute;

How these big tech companies pay out to entertainment companies like the big record labels and movie studios, as well as independent and smaller studios, labels, publishers, etc.; and

How much of that big tech money finds its way into the pockets of artists, and how much is pocketed by the intermediaries in the music, movie, and publishing industries.

Monopolies laugh at copyright

It's possible -- likely, even! -- that if we knew the relevant financials that we would object to the way money is being distributed among the players in the industry. Let's assume that a full accounting of the economics of entertainment in the era of big tech displeases us, what could we do about it?

Well, we could create a system like Article 13's censorship blacklists. Entertainment companies could add their artists' products to the blacklists and Big Tech would no longer profit from those works unless they could offer the Big Content companies enough to take them out of the blacklist databases.

This would probably tilt the balance of payments away from Big Tech and towards Big Content, but not by much. The thing is, Big Tech has come to monopolise our attention: there is virtually no way for new material to be discovered without the "sharing" platforms (which is why Big Content spends millions to get their work featured on Big Tech's platforms, even cheating at times).

There aren't that many places where Big Content can find the audiences that keep them profitable: Facebook, Google, Twitter, Apple, Amazon, a few others. The concentration in Big Tech means that even with additional copyright powers, if Big Tech doesn't want to buy at the price that Big Content is selling for, Big Content will need to lower their prices. Big Tech doesn't hold all the cards, but it sure holds most of them.

Article 13 won't help. Even if Big Tech has to pay a little extra for licensing at first, the long-term effect of Article 13 will be to reduce competition in tech, leading to even more concentration and even more market power. Even if a fast-growing little online company manages to grow to challenge YouTube or Facebook, the instant it crosses into that competitive territory, it will be classed as a "large platform" under Article 13, meaning that it will then acquire a legal obligation to spend $100-$300 million on the filters Article 13 will require of "large platforms", or face blanket liability for every arguably infringing file that their users upload onto their service. Neither YouTube, nor Facebook, nor Twitter could have grown to their current size if going from "small" to "large" had meant spending hundreds of millions extra to comply with European copyright law.

If you think that Facebook and YouTube are tough to negotiate with in 2018, then give them a decade without any competition and see just how tough they get.

What about artists?

Artists of all description commonly say that the corporations they sell their works through do not pay them their fair share. The thing is, there are a lot more artists who want to reach audiences than there are companies willing to pay for those artists' work, and only a minority of people who are good at making art are also good at marketing their work.

That means that just as Big Content finds itself unable to exert leverage over Big Tech, little artists can't exert leverage over the corporations that pay to use their works. It would be very naive to assume that putting more money in a giant media company's pockets would result in the extra money going to the artists whose works Big Content is selling to Big Tech. It's much more likely that the new funds will be funneled straight to Big Content's shareholders; indeed, the shareholders would insist upon it.

So what's the alternative?

Many B2B payments in the entertainment world are not negotiated. Radio stations and cable operators don't negotiate for every copyrighted work they make available. They rely instead on blanket licenses, some set by statute and others by negotiated blanket licenses that are overseen by collecting societies or rights societies. Some of these rates are too high and some are too low and some of the rights societies have a poor track-record when it comes to fairly distributing the money they take in, but few people would argue that it's impossible to get the payments right, or to fairly distribute them.

Getting artists paid by using Article 13's blacklists requires a lot of unprecedented things to happen: the filters have to work, and not be abused; they have to provide sufficient leverage to generate higher payments than the current ad-based systems, and then the big entertainment companies who receive those payments have to give that money to artists instead of keeping it for their shareholders.

Or we could just treat YouTube as another one of the B2B entities in the world's entertainment markets. We could create blanket licenses and set fair (for the artist and the entertainment company) prices for each viewing. The artists could get a mandatory minimum share of those payments, overriding the contracts they negotiate under duress with the entertainment companies.

With that system, anyone could start a YouTube (or Facebook, or Apple) competitor and access the identical catalog of content that Big Tech has, and pay proportionately to use it: if you're 1/1,000,000th the size of YouTube, you owe 1/1,000,000th the payout that YouTube pays, and as you grow, so does your share, without any sticker-shocks when you level up from "small" to "big" and would otherwise have to install Article 13's filters.

Best of all, this requires no speculation: rather than creating filters unlike any the Earth has ever seen (and that experts say will never work), we just tell Google how much we think copyrighted works should cost, take that money from them, and split it between entertainment companies and creators.

There are many questions that would need to be answered about blanket licenses, and there are plenty of versions of this approach that could be bad for the Net. And if European lawmakers want to pursue this route, they would have to be prepared to upset both Big Tech nor Big Content. But their job isn’t to represent those multinational corporate interests: it is to represent those who are not “Big” anything — individual Internet users, creators, and artists, as well as the future tech innovators and challengers to the business interests of today. It’s an approach that has worked in the past, and doesn’t depend on making everyone on the Internet liable, and everything on the Internet censorable.

But YouTube's CEO says she likes filters!

Yes, it seems she does. After lobbying like crazy against Article 13, Google has changed tactics and decided that they want filters, because they already have ContentID for YouTube and can afford to pay to expand it across all their platforms. (Remember, it was Google that suggested ContentID to Europe as a model for enforcement when the Copyright Directive was just getting started.)

Like every monopolist, Google's first preference was always going to be no regulation; but their second preference was also always going to be lots of regulation, provided that they could afford the regulatory costs and no one who might challenge them could.

Even if you think YouTube has been drastically underpaying artists, letting them buy perpetual Internet domination for the price of some big filters is a bad way to fix this.

Instead of breaking the Internet, let's fix copyright: let's come up with rules that reduce monopoly power, increase competition and puts money in the pockets of artists. If we want Google to pay creators more, let's just make Google pay creators more and skip the censorware.

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